Goal Check: Assessing Your Financial Goals in the New Year

Written by M. Denise Quinn, CFP®

Lead Advisor

The start of a new year is an ideal time to review and reset your life goals. As your advisors, we focus on reassessing your financial objectives and incorporating any life changes since your last review. Life is constantly evolving, and your financial plan should reflect that.

Personal Life Changes

Consider any new family members since your last plan review, including spouses of children or grandchildren. You may want to include gifting strategies, education savings, and financial support.

For 2025, the annual gift limit is $19,000 per donee, per recipient, allowing a couple with a new grandchild to gift $38,000 free of gift tax. The same limit applies to 529 plans, with tax-deferred growth and tax-free withdrawals for qualified education expenses.

If your children or grandchildren are beneficiaries in Wills or Trusts, review with your estate attorney how a marriage or divorce could impact your plans.

Losing a family member is always hard to go through, and the administrative details for the executor of their will make the experience even more challenging. While it may sound morbid, ensure your beneficiary designations, including retirement plans and life insurance, are accurate to save your family the headache in the future.

Financial Markets and Tax Regulation Changes

We recommend reviewing your cash flow projections annually to adjust for changes in savings, spending, and market performance. This helps ensure your long-term goals remain on track.

Consult with your tax preparer before year-end to assess your tax situation, especially in years with significant events such as large gains or charitable gifting. Your tax advisor can help optimize income and expenses for tax advantages.

Maximizing contributions to qualified plans is key. The IRS adjusts contribution limits annually, so check your employer’s plan to ensure your contributions are on track. You may also be eligible to contribute to traditional or Roth IRAs.

Changes in Required Minimum Distributions (RMDs) are important to track. The starting age for RMDs was raised to 72 in 2020, and the SECURE Act 2.0 extends this to 75 by 2033. Failing to follow RMD rules can result in penalties.

The SECURE Act also impacts inherited IRAs, reducing flexibility for beneficiaries. Most must now distribute the balance within 10 years, which may push them into higher tax brackets.

Estate Tax Law Changes

The estate tax exemption has doubled since 2018 and is annually adjusted for inflation. For 2024, the exemption is $13.61 million per person. These exemptions are set to expire after 2025, though most experts expect them to be extended.

Retirement and Employment Changes

Retirement planning involves many decisions, including when to retire, whether you can reduce your hours, and when to start Social Security benefits. Review your employer-provided benefits and consider rolling over your retirement plan to an IRA. Changes in income could also affect Medicare premiums, so plan accordingly.

Changing employers or experiencing unemployment can impact your financial goals. Be sure to roll over retirement balances, take advantage of COBRA for health insurance, and ensure your former employer has updated contact details for any paperwork.

Success in achieving your financial goals relies on creating a solid plan and regularly updating it. It’s never too late to start, and the earlier you create the plan, the better your chances for success. Reach out to our team here at Signature Wealth for